Our appraiser friends can’t seem to catch a break.
Not too long ago, the appraiser was nothing more than another cog in the homebuying machine. If not exactly unsung, appraisers were certainly an unassuming part of the homebuying process. And we’re sure that was just fine with them.
But the housing boom and its attendant bust shattered that sense of quiet professionalism. Today, the appraisal industry is certainly professional, but there’s nothing quiet about it.
Since 2008, appraisers have been hammered by a series of regulatory processes and codes explicitly designed to let appraisers know they were being watched. And while we can’t argue with the motivations, we are comfortable saying things may have gotten blown out of proportion.
As a result, appraisers have been forced to work for appraisal management company overlords that – at least anecdotally – have cut their pay and increased their hours. This, in turn, has forced many seasoned professionals out of the business, leaving much of their work in the hands of younger apprentices ill-equipped themselves to handle the unique demands of the job.
All the while, there was another indignity appraisers were forced to bear as a result of the bust – one perhaps of less regulatory importance, but no less devastating on their collective psyche.
During the boom, and before, appraisers had the happy job of letting homeowners know that yes, indeed, their life’s largest investment had gone up in value. They validated every homeowner’s bet on the wisdom of buying over renting, and offered tangible returns – in the form of a favorable appraisal – to the blood and sweat equity owners had poured into their homes over the years.
And that must have made appraisers feel good.
But after the bust, that story changed. Appraisers accustomed to giving good news – and homeowners expecting to hear it – instead were presented with a changing dataset that forced them to deliver bad news instead. Blood and sweat equity was wiped out. Futures became a lot less certain.
And while falling home values certainly weren’t the work of appraisers themselves, we all know how difficult it can sometimes be to separate the message from the messenger.
Still, if only because of the sheer number of times the message was delivered, we imagine the shock of lower-than-expected home values faded some. And as new rules were implemented and integrated into the profession, appraisers may have sensed a return to their more familiar role as the quiet cog in the machine. Show up, perform their duty and move on.
But now, just as they were settling back into that quiet routine, the game has changed again. The market is picking up. That pent-up demand we’ve all been guessing was out there is starting to show itself. There is optimism in the market again, for buyers, sellers and their agents. And they are all starving for the affirmation that yes, things have improved – affirmation which can only come from an appraiser’s judgment.
Only appraisers can’t give it to them.
Appraisers can only work with what’s in front of them. And all their data suggests that prices aren’t quite ready to rise to meet that growing optimism. No matter how much they may want to, they can’t turn in higher appraisals just because someone told them to. That is part of what got them into hot water in the first place.
And that must make them feel terrible.
But there is hope. Prices can only lag for so long before the unbreakable laws of supply and demand catch up. More sales will, at some point, translate into higher prices. Salad days will return again.
It’s small comfort, we’re sure, to those appraisers who never wanted to spike a deal or complicate a negotiation. But after the past five years, we think they’ll welcome it.
